Brightcove Inc. (Nasdaq: BCOV), the leading provider of cloud
services for video, today announced financial results for the first
quarter ended March 31, 2020.
“Brightcove is focused on supporting our customers as they
adjust their businesses for the impact of the COVID-19 pandemic.
The recent release of Brightcove Engage and Brightcove Continuum
are the latest examples of how we empower organizations to increase
engagement and connectivity with their employees and customers,”
said Jeff Ray, Brightcove’s Chief Executive Officer.
Ray added, “We are pleased with the progress we are making on
our strategic initiatives and customer response to our new
products, particularly Brightcove Beacon™. While the near-term
outlook is uncertain due to COVID-19, we remain confident the
investments we have made in our products and our go-to-market team
will deliver strong returns over time.”
First Quarter 2020 Financial Highlights:
● Revenue for the first quarter of 2020 was $46.7
million, an increase of 12% compared to $41.8 million for the first
quarter of 2019. Subscription and support revenue was $44.7
million, an increase of 15% compared to $38.9 million for the first
quarter of 2019.
● Gross profit for the first quarter of 2020 was $28.0
million, representing a gross margin of 60% compared to a gross
profit of $25.1 million for the first quarter of 2019. Non-GAAP
gross profit for the first quarter of 2020 was $28.8 million,
representing a non-GAAP gross margin of 62%, compared to a non-GAAP
gross profit of $25.5 million for the first quarter of 2019.
Non-GAAP gross profit and non-GAAP gross margin exclude stock-based
compensation expense and the amortization of acquired intangible
assets.
● Loss from operations was $7.1 million for the first
quarter of 2020, compared to a loss of $4.8 million for the first
quarter of 2019. Non-GAAP operating income, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets and merger-related expense, was $2.3 million for
the first quarter of 2020, compared to non-GAAP operating income of
$19,000 during the first quarter of 2019.
● Net loss was $7.9 million, or $0.20 per diluted share,
for the first quarter of 2020. This compares to a net loss of $5.0
million, or $0.14 per diluted share, for the first quarter of 2019.
Non-GAAP net income, which excludes stock-based compensation
expense, the amortization of acquired intangible assets,
merger-related expense and restructuring was $1.5 million for the
first quarter of 2020, or $0.04 per diluted share, compared to
non-GAAP net loss of $211,000 for the first quarter of 2019, or
$0.01 per diluted share.
● Adjusted EBITDA was $3.7 million for the first quarter
of 2020, compared to adjusted EBITDA of $1.3 million for the first
quarter of 2019. Adjusted EBITDA excludes stock-based compensation
expense, merger-related expense, restructuring, the amortization of
acquired intangible assets, depreciation expense, other
income/expense and the provision for income taxes.
● Cash flow provided by operations was $2.4 million for
the first quarter for 2020, compared to $263,000 for the first
quarter of 2019.
● Free cash flow was negative $252,000 after the company
invested $2.7 million in capital expenditures and capitalization of
internal-use software during the first quarter of 2020. Free cash
flow was negative $927,000 for the first quarter of 2019.
● Cash and cash equivalents were $32.1 million as of
March 31, 2020 compared to $22.8 million on December 31, 2019.
A Reconciliation of GAAP to Non-GAAP results has been provided
in the financial statement tables included at the end of this press
release. An explanation of these measures is also included below
under the heading “Non-GAAP Financial Measures.”
Other First Quarter and Recent Highlights:
● Average annual subscription revenue per premium customer was
$84,600 in the first quarter of 2020, excluding starter customers
who had average annualized revenue of $4,500 per customer. This
compares to $77,800 in the comparable period in 2019.
● Recurring dollar retention rate was 88% in the first quarter
of 2020, versus our historical target of the low to mid-90 percent
range.
● Ended the quarter with 3,498 customers, of which 2,293 were
premium.
● New customers and customers who expanded their relationship
during the first quarter include: Dell, Wendy’s Merck, Feel
Communications, New England Sports Network and Barbri.
● Announced Brightcove Engage, a purpose-built application
developed for internal communications professionals to inform
employees using the most powerful and effective means of
communications ever created: mobile video. With templates for
quickly organizing content, analytics for monitoring engagement,
and enterprise-grade security and stability, Brightcove Engage
streamlines internal communications using the power of video.
● Announced Brightcove Continuum, a new business continuity
suite to support business communication functions across the
enterprise. By leveraging live and on-demand streaming services,
organizations can employ the use of video to stay connected to
employees and customers. Launching through direct and channel
sales, Brightcove Continuum is available to all organizations
looking to strategically manage video communications.
● Announced the launch of PLAY TV, an innovative over-the-top
streaming experience with the most must-watch content focused on
video, coming in May. Utilizing Brightcove Beacon, PLAY TV will
become a trusted source for viewers on the changing world of video
and will include inspiring live keynotes, along with channels
offering thought leadership, customer stories, video best practices
and more.
Business Outlook
Based on information as of today, April 29, 2020, the Company is
issuing the following financial guidance. In light of the current
COVID-19 crisis, Brightcove is withdrawing its full-year 2020
guidance provided on February 19, 2020. The company will reassess
this position based on its review of the macroeconomic recovery at
the end of the second quarter.
Second Quarter 2020:
● Revenue is expected to be in the range of $44.5 million
to $46.0 million, including approximately $2.2 million of
professional services revenue.
● Non-GAAP loss from operations is expected to be in the
range of $1.7 million to $0.2 million, which excludes stock-based
compensation of approximately $2.0 million, the amortization of
acquired intangible assets of approximately $0.8 million,
restructuring of approximately $0.9 million and merger-related
expenses of $0.1 million.
● Adjusted EBITDA is expected to be in the range of a
loss of $0.5 million to an adjusted EBITDA gain of $1.0 million,
which excludes stock-based compensation of approximately $2.0
million, the amortization of acquired intangible assets of
approximately $0.8 million, restructuring of approximately $0.9
million, merger-related expenses of $0.1 million, depreciation
expense of approximately $1.2 million and other income/expense and
the provision for income taxes of approximately $0.3 million.
● Non-GAAP net loss per diluted share is expected to be
$0.05 to $0.01, which excludes stock-based compensation of
approximately $2.0 million, the amortization of acquired intangible
assets of approximately $0.8 million, restructuring of
approximately $0.9 million, merger-related expenses of $0.1
million, and assumes approximately 39.3 million weighted-average
shares outstanding.
Conference Call Information
Brightcove will host a conference call today, April 29, 2020, at
5:00 p.m. (Eastern Time) to discuss the Company's financial results
and current business outlook. A live webcast of the call will be
available at the “Investors” page of the Company’s website,
http://investor.brightcove.com. To access the call, dial
855-327-6837 (domestic) or 631-891-4304 (international). A replay
of this conference call will be available for a limited time at
844-512-2921 (domestic) or 412-317-6671 (international). The replay
conference ID is 10009285. A replay of the webcast will also be
available for a limited time at http://investor.brightcove.com.
About Brightcove Inc. (NASDAQ: BCOV)
We are the people behind the world’s leading video technology
platform. With our award-winning technology and services, we help
organizations in more than 70 countries meet business challenges
and create strategic opportunities by inspiring, entertaining, and
engaging their audiences through video.
Since Brightcove was established in 2004, we have consistently
pushed boundaries to create a platform for people who are serious
about video: one that is robust, scalable, and intuitive.
Benefiting from a global infrastructure, unrivalled customer
support, an extensive partner ecosystem, and relentless investment
in R&D, Brightcove video sets the standard for professional
grade video management, distribution, and monetization. To learn
more, visit www.brightcove.com.
Forward-Looking Statements
This press release includes certain “forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements concerning our financial guidance for
the second fiscal quarter of 2020, our position to execute on our
growth strategy, and our ability to expand our leadership position
and market opportunity. These forward-looking statements include,
but are not limited to, plans, objectives, expectations and
intentions and other statements contained in this press release
that are not historical facts and statements identified by words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates" or words of similar meaning. These
forward-looking statements reflect our current views about our
plans, intentions, expectations, strategies and prospects, which
are based on the information currently available to us and on
assumptions we have made. Although we believe that our plans,
intentions, expectations, strategies and prospects as reflected in
or suggested by those forward-looking statements are reasonable, we
can give no assurance that the plans, intentions, expectations or
strategies will be attained or achieved. Furthermore, actual
results may differ materially from those described in the
forward-looking statements and will be affected by a variety of
risks and factors that are beyond our control including, without
limitation: the effect of the COVID-19 pandemic, including our
business operations, as well as its impact on the general economic
and financial market conditions; our ability to retain existing
customers and acquire new ones; our history of losses; the timing
and successful integration of the Ooyala acquisition; expectations
regarding the widespread adoption of customer demand for our
products; the effects of increased competition and commoditization
of services we offer, including data delivery and storage; keeping
up with the rapid technological change required to remain
competitive in our industry; our ability to manage our growth
effectively and successfully recruit additional highly-qualified
personnel; the price volatility of our common stock; and other
risks set forth under the caption "Risk Factors" in our most
recently filed Annual Report on Form 10-K, as updated by our
subsequently filed Quarterly Reports on Form 10-Q and our other SEC
filings. We assume no obligation to update any forward-looking
statements contained in this document as a result of new
information, future events or otherwise.
Non-GAAP Financial Measures
Brightcove has provided in this release the non-GAAP financial
measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP
income (loss) from operations, non-GAAP net income (loss), adjusted
EBITDA and non-GAAP diluted net income (loss) per share. Brightcove
uses these non-GAAP financial measures internally in analyzing its
financial results and believes they are useful to investors, as a
supplement to GAAP measures, in evaluating Brightcove's ongoing
operational performance. Brightcove believes that the use of these
non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
and in comparing its financial results with other companies in
Brightcove’s industry, many of which present similar non-GAAP
financial measures to investors. As noted, the non-GAAP financial
results discussed above of non-GAAP gross profit, non-GAAP gross
margin, non-GAAP income (loss) from operations, non-GAAP net income
(loss) and non-GAAP diluted net income (loss) per share exclude
stock-based compensation expense, the amortization of acquired
intangible assets and merger-related expenses. The non-GAAP
financial results discussed above of adjusted EBITDA is defined as
consolidated net income (loss), plus stock-based compensation
expense, the amortization of acquired intangible assets,
merger-related expenses, restructuring, depreciation expense, other
income/expense, including interest expense and interest income, and
the provision for income taxes. Merger-related expenses include
fees incurred in connection with an acquisition. Non-GAAP financial
measures have limitations as an analytical tool and should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. Investors are
encouraged to review the reconciliation of these non-GAAP measures
to their most directly comparable GAAP financial measures. As
previously mentioned, a reconciliation of our non-GAAP financial
measures to their most directly comparable GAAP measures has been
provided in the financial statement tables included below in this
press release. The Company’s earnings press releases containing
such non-GAAP reconciliations can be found on the Investors section
of the Company’s web site at http://www.brightcove.com.
Brightcove Inc. Condensed Consolidated Balance Sheets
(in thousands) March 31, 2020 December 31,
2019 Assets Current assets: Cash and cash equivalents
$
32,089
$
22,759
Accounts receivable, net of allowance
27,334
31,181
Prepaid expenses and other current assets
14,876
11,884
Total current assets
74,299
65,824
Property and equipment, net
13,383
12,086
Operating lease right-of-use asset
14,900
16,912
Intangible assets, net
12,903
13,875
Goodwill
60,902
60,902
Other assets
2,984
3,268
Total assets
$
179,371
$
172,867
Liabilities and stockholders' equity Current
liabilities: Accounts payable
$
12,428
$
9,917
Accrued expenses
19,661
20,925
Operating lease liability
5,875
6,174
Deferred revenue
52,356
49,260
Total current liabilities
90,320
86,276
Operating lease liability, net of current portion
9,953
11,701
Debt
10,000
-
Other liabilities
538
767
Total liabilities
110,811
98,744
Stockholders' equity: Common stock
39
39
Additional paid-in capital
279,114
276,365
Treasury stock, at cost
(871
)
(871
)
Accumulated other comprehensive loss
(1,244
)
(785
)
Accumulated deficit
(208,478
)
(200,625
)
Total stockholders’ equity
68,560
74,123
Total liabilities and stockholders' equity
$
179,371
$
172,867
Brightcove Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share amounts)
Three Months Ended March 31,
2020
2019
Revenue:
Subscription and support revenue
$
44,658
$
38,877
Professional
services and other revenue
1,995
2,959
Total revenue
46,653
41,836
Cost of revenue: (1) (2)
Cost of
subscription and support revenue
16,748
14,170
Cost of
professional services and other revenue
1,894
2,576
Total cost of revenue
18,642
16,746
Gross profit
28,011
25,090
Operating expenses: (1) (2)
Research and
development
8,853
7,394
Sales and
marketing
14,174
14,256
General and
administrative
6,532
5,261
Merger-related
5,509
2,932
Total operating expenses
35,068
29,843
Loss from operations
(7,057
)
(4,753
)
Other (expense) income, net
(468
)
(55
)
Net loss before income taxes
(7,525
)
(4,808
)
Provision for income taxes
328
175
Net loss
$
(7,853
)
$
(4,983
)
Net (loss) income per share—basic and diluted
Basic
$
(0.20
)
$
(0.14
)
Diluted
(0.20
)
(0.14
)
Weighted-average shares—basic and diluted
Basic
38,981
36,677
Diluted
38,981
36,677
(1) Stock-based compensation included in above line items:
Cost of
subscription and support revenue
$
190
$
119
Cost of
professional services and other revenue
80
84
Research and
development
440
263
Sales and
marketing
911
458
General and
administrative
997
500
(2) Amortization of acquired intangible assets
included in the above line items:
Cost of
subscription and support revenue
$
495
$
255
Sales and
marketing
477
161
Brightcove Inc.
Condensed Consolidated
Statements of Cash
Flows
(in thousands)
Three Months Ended March 31, Operating
activities
2020
2019
Net loss
$
(7,853
)
$
(4,983
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
2,408
1,713
Stock-based compensation
2,618
1,424
Provision for reserves on accounts receivable
275
70
Changes in assets and liabilities:
Accounts receivable
3,607
(2,033
)
Prepaid expenses and
other current assets
(1,843
)
(803
)
Other assets
195
92
Accounts payable
2,364
715
Accrued expenses
(2,264
)
353
Operating leases
(34
)
(68
)
Deferred revenue
2,968
3,783
Net cash provided by operating activities
2,441
263
Investing activities Purchases of property and
equipment, net of returns
(720
)
(244
)
Capitalization of internal-use software costs
(1,973
)
(946
)
Net cash used in investing activities
(2,693
)
(1,190
)
Financing activities Proceeds from exercise of stock
options
36
625
Proceeds from debt
10,000
-
Other financing activities
(26
)
(58
)
Net cash provided by financing activities
10,010
567
Effect of exchange rate changes on cash and cash equivalents
(428
)
2
Net increase (decrease) in cash and cash equivalents
9,330
(358
)
Cash and cash equivalents at beginning of period
22,759
29,306
Cash and cash equivalents at end of period
$
32,089
$
28,948
Brightcove Inc. Reconciliation of GAAP Gross Profit, GAAP
Loss From Operations, GAAP Net Loss and GAAP Net Loss Per Share
to Non-GAAP Gross Profit, Non-GAAP Income From
Operations, Non-GAAP Net Income (Loss) and Non-GAAP Net Income
(Loss) Per Share (in thousands, except per share
amounts) Three Months Ended March 31,
2020
2019
GROSS PROFIT: GAAP gross profit
$
28,011
$
25,090
Stock-based compensation expense
270
203
Amortization of acquired intangible assets
495
255
Non-GAAP gross profit
$
28,776
$
25,548
LOSS FROM OPERATIONS: GAAP loss from operations
$
(7,057
)
$
(4,753
)
Stock-based compensation expense
2,618
1,424
Amortization of acquired intangible assets
972
416
Merger-related
5,509
2,932
Restructuring
229
-
Non-GAAP income from operations
$
2,271
$
19
NET LOSS: GAAP net loss
$
(7,853
)
$
(4,983
)
Stock-based compensation expense
2,618
1,424
Amortization of acquired intangible assets
972
416
Merger-related
5,509
2,932
Restructuring
229
-
Non-GAAP net income (loss)
$
1,475
$
(211
)
GAAP diluted net income (loss) per share
$
(0.20
)
$
(0.14
)
Non-GAAP diluted net income (loss) per share
$
0.04
$
(0.01
)
Shares used in computing GAAP diluted net loss per
share
38,981
36,677
Shares used in computing Non-GAAP diluted net income (loss) per
share
39,449
36,677
Brightcove Inc. Calculation of Adjusted EBITDA (in
thousands)
Three
Months Ended March 31,
2020
2019
Net loss
$
(7,853
)
$
(4,983
)
Other expense, net
468
55
Provision for income taxes
328
175
Depreciation and amortization
2,408
1,713
Stock-based compensation expense
2,618
1,424
Merger-related
5,509
2,932
Restructuring
229
-
Adjusted EBITDA
$
3,707
$
1,316
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200429005850/en/
Investors: ICR for Brightcove Brian Denyeau, 646-277-1251
brian.denyeau@icrinc.com or Media: Brightcove Meredith
Duhaime mduhaime@brightcove.com
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